Pay no attention to the people behind the curtain

Thursday, April 30, 2009

Put this lie to rest, please!

by folkbum

Among the plaints in the McKinsey & Co. report on MPS finances and the hand-wringing that followed were dozens of variations on or repetitions of one misrepresentation in particular that is just bugging the mess out of me. This is taken from this morning's Alan Borsuk story on new Milwaukee Board of School Directors President Michael Bonds, my emphasis:

[Bonds] said he is working with several state Assembly members from Milwaukee on a proposal that would let MPS give financial incentives to employees who select the cheaper of two major health plans offered. Family coverage under one plan costs more than $7,000 a year less than under the other plan, but employees have no incentive to choose the lower-priced plan. The consultant's report urged such a step.

Borsuk has thrown that line into a number of stories lately, and even repeated it on WUWM's "Lake Effect" earlier this week. But it's not true.

In fact, MPS employees do have incentive to choose the lower-priced, more restrictive HMO plan over the less-restricted PPO. And you don't have to be some kind of insider or expert in legalese to learn that fact, as all the information anyone needs to learn the truth of the matter is publicly available on the website of the MTEA, Milwaukee's teacher union. Seriously. Go to mtea,org, click on "Insurance Benefits," then "Health," and then you get directed to a .pdf called, of all things, "heatlhplancomparison2007.pdf." (2007 was the year the current contract was signed.) Among the incentives to choose the cheaper and more restrictive HMO:

The HMO has no deductible, while the PPO has a $100 (individual) or $300 (family) deductible.

The HMO has a coinsurance limit of $150 (i) or $450 (f) while the PPO has a coinsurance limit of $200 (i) or $600 (f)--up to $500 (i) and $1500 (f) for out-of-network services.

A number of the services covered at 90% by the PPO are covered at 100% by the HMO.

Plus, the McKinsey report itself does not say that there is no incentive to choose the cheaper plan. It reads, "[T]he HMO has a slightly lower deductible and co-insurance rate," suggesting reasons why employees might choose the HMO--and then the report notes that employees who are paid less (and for whom the difference might be significant--are more likely to opt for the HMO after all. "[O]nly 33 percent of food service workers opt for the PPO, while 65 percent of central administration employees do," the report notes as an example.

I'm not so naïve as to suggest that selecting the PPO plan creates such an incredible burden on the average family that they have to choose the cheaper plan--in other words, I know that most of you reading would probably kill to have the PPO plan even at its higher cost. (MPS needs math, science, and special education teachers, so, technically, you don't have to kill to get the benefits, you just have to get into a program.)

However, it is pretty clearly false to suggest that there "is no incentive" for employees to choose the cheaper plan. So put that one out to pasture. If you must, you can say something like, "There is no great incentive to choose the cheaper plan"--a thousand bucks or so isn't a lot, I know--which would be much more honest while still getting your idea across.